House Speaker Paul Ryan of Wis. meets with reporters on Capitol Hill in Washington.

By Zachary Tracer, Billy House and Anna Edney
Bloomberg
February 24, 2017

(Bloomberg) -- Republican lawmakers expect that their Obamacare replacement will result in fewer Americans covered by health insurance, a fact that’s likely to increase blowback amid growing support for the program.

New details of the plan are beginning to emerge, described by lawmakers and their aides. While still being worked out, it would do away with the Affordable Care Act’s requirement that all Americans have health coverage or pay a fine, and replace it with rules that let people choose not to buy insurance, instead paying higher premiums or penalties if they need it later. The result would be fewer people covered, said Republican lawmakers.

“Not everybody is going to have health care -- some people just don’t care enough about their own care,” Representative Dennis Ross of Florida, a senior member of House Republicans’ vote-counting team, said in an interview Wednesday. He said Republicans can provide people access to affordable insurance plans, “but whether they take it or not is like trying to legislate responsibility.”

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The plan was described by Republicans in interviews and by aides to lawmakers who spoke of condition of anonymity because it’s not yet public. Parts of it are also contained in an outline distributed last week, some based on House Speaker Paul Ryan’s “Better Way” program.

While the Republican plan would provide tax credits to help people buy insurance, similar to Obamacare, those subsidies would be based on age rather than income. That means poorer people wouldn’t get additional money to help them afford insurance, potentially putting coverage out of financial reach. Republicans have also threatened to roll back an expansion of Medicaid. About 10 million people are covered in Obamacare’s individual insurance markets, and about 12 million have coverage through the Medicaid expansion.

Fewer people covered under a GOP plan also contradicts what President Donald Trump has promised.

“We’re going to have insurance for everybody,” Trump said in a Jan. 14 interview with the Washington Post. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it,” Trump told the newspaper. “That’s not going to happen with us.”

Rising Support for Law

The GOP repeal plans have galvanized supporters of the law. At town halls held this week around the country by Republican lawmakers, they’ve been questioned and heckled by citizens demanding they back down from their repeal plans. Two new polls also show support of the law growing: a Pew Research Center survey conducted from Feb. 7-12 found that 54 percent of Americans surveyed approve of the law, the highest mark recorded by the survey. A Kaiser Family Foundation poll released Friday found that 48 percent of people support the ACA, and 43 percent disapprove -- the widest margin of support since 2010.

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On Friday, Trump called Obamacare “a failed health-care law that threatens our medical system. An absolute and utter catastrophe.” He was speaking at CPAC, a conservative political gathering in Washington, and again promised to repeal and replace the law.

Less Insurance, More Liberty

One Republican painted a drop in insurance coverage as a positive, if it was the result of ending Obamacare policies such as the insurance requirement that conservatives oppose.

“We’re not going to send an IRS agent out to chase you down and make you buy health insurance,” said Representative Michael Burgess, a Texas Republican who’s a medical doctor and head of the House Energy and Commerce subcommittee on health. “If the numbers drop, I would say that’s a good thing, because we’ve restored personal liberty in this country.”

Under Obamacare, insurers can’t charge people who are sick higher premiums, or deny them coverage. Under the GOP replacement plan, insurers would be allowed to charge more to anyone -- whether healthy, or with a pre-existing medical conditions -- who had a gap in their health insurance coverage. That’s designed to create a strong financial incentive for people to buy and keep health insurance, without formally requiring them to do so.

Access Versus Coverage

At the core of the Republican argument in favor of their plan is that it will expand access to insurance for those who want it, rather than expanding total coverage by forcing people to. The requirements for repealing the ACA mean it’s not possible to keep the same number of people covered, said Representative Trent Franks, an Arizona Republican.

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“You can’t do that,” Franks said in an interview.

For the Republican plan to work, it needs to make sure tax subsidies get people to buy insurance who wouldn’t otherwise, said Rebecca Owen, a health research actuary with the Society of Actuaries.

“A perfect system encourages everyone to buy an insurance package,” said Owen. “It would not be a good thing to go back to the days of a large proportion of our population not having insurance.”

Doubts All Around

And there are doubts among Republicans about the plan, and whether it can gain enough support in their own party. “It’s a far cry from a conservative plan,” Representative Mark Meadows of North Carolina, chairman of the House Freedom Caucus, said on Wednesday. He said there remains no consensus among Republicans that this is the way forward, and few details such as what the law will cost.

When Democrats passed Obamacare in 2010, the coverage requirement was meant to force younger, healthier people into the system to subsidize the older and sicker. Penalties for not having coverage were light, however. A family that went without coverage in 2015 would have paid a fine of $975 -- more for wealthier families. Insurers have said they need a policy that achieves a similar effect as a mandate.

Republicans have yet to introduce a formal bill in the House or Senate, and the timeline to act has been pushed back repeatedly from promises made during the 2016 elections that a repeal and replace package would be ready during the first days of the new administration. Trump said Wednesday that there would be a White House health plan by early- or mid-March.

Congressional Plans

“We’re working hard on legislation to deliver relief from Obamacare’s skyrocketing costs and dwindling choices; restore state control; strengthen Americans’ access to care; and reinvigorate the free market in health care,” said Kevin Brady, chairman of the House Ways and Means Committee. Brady said the House will move forward with legislation in March.

There are doubters that Republicans will succeed with repeal, or if they do, that it will significantly change the existing law. Former Speaker of the House John Boehner, who led the fight against Obamacare until stepping down in 2015, predicted at a health industry gathering in Florida Thursday that changes would be modest.

“They’ll fix the flaws and put a more conservative box around it,” Boehner said. “The framework is going to stay there.”